 The libertarian movement has lost its way over the past 60 years as it shifted from Friedrich Hayd's classical liberal corrective to depression-era central planning to Murray Rothbard's full-blown anarcho-capitalism in which all taxation is theft and all transfer payments are immoral. That's the argument in a provocative new book called Burning Down the House, how libertarian philosophy was corrupted by delusion and greed by Andrew Koppelman. Reason spoke with Koppelman, a law professor at Northwestern University, about why he believes classical liberals have given ground to anarchists and how that fundamentally changes not just the rhetoric, but the political goals of the libertarian movement. Andrew Koppelman, thanks for talking to me. I'm very happy to have you be here. All right. So, here, give me this. You're a law professor at Northwestern University, right? You've taught various places and things like that. Let's start. What's the elevator pitch of Burning Down the House? The elevator pitch is that American libertarianism has a valid core. The valid core is understanding the value of free markets, which is something that is not well understood by everyone on the left. That libertarianism has increasingly taken the form of an extreme anti-statism, which its proponents believe will actually advance human liberty if we cripple the capacities of the American state. It's not going to do that, and a large part of what the state does is it protects us from predators and from forces that aren't anybody's fault, but that you need the state to control, such as COVID, it's a good example, and so the interest in crippling state capacity has ended up being a coalition of two different groups of folks. There are the folks who believe in bad political philosophy. That's really the audience for my book, is people who are attracted to this philosophy and who I want to persuade. Too bad political philosophy. Bad political philosophy. Political philosophy that is poorly reasoned and that will not lead to the attractive results that it advertises, will not lead to an advance in human freedom. In politics, the desire to cripple state capacity attracts a coalition of idealists who believe in that stuff, and unscrupulous businessmen. Most businessmen are very scrupulous, but the unscrupulous ones are drawn to this because it enables them to hurt people without being bothered by the police. When there's delusion and greed, that's the delusion and that's the greed. You kind of put some names on this. Essentially the book is about how libertarianism used to be, and I think your case here is pretty valid. In the mid-20th century or in the second half of the 20th century, libertarianism was kind of dominated by the thought of Friedrich Hayek, and Hayekian libertarianism was clearly part of a liberal political philosophy. It was on a range, and there were people to the left and to the right, but he believed in things like a functioning government, social welfare spending. Basically he believed in limited government, more limited than people on the left, less limited and more limited than people on the right in different ways. That over time gave way ultimately to a libertarianism which is really characterized by the thought of Murray Rothbard and is a species of anarchism. It's a kind of right-wing anarcho-capitalism. Let's start with the controlling metaphor of the book, Burning Down the House, because you start out and you come back to a story from a few years ago. What are you referencing in the title, Burning Down the House? The story is an episode in Obam County, Tennessee. The county doesn't have its own fire department, and so it contracted with a nearby fire department or more precisely it made arrangements for its individual residents to contract with that nearby fire department for fire protection. There was an aging man, Gene Cranick, had paid the fee every year, but he's getting old, he starts forgetting things, he forgets to make the payment one year and a fire breaks out at his house and they call the fire department and they're told that, sorry, you didn't pay, you can't pay now, it's too late, there's nothing that we can do for you and the fire department ends up coming and they stand there and they watch his house burn down. They're there in case the house spreads to the houses of the neighbors who did pay because that's what they understand their function. And this episode generates a furious debate in the press and one of the points of agreement between the left and the right is that this is the true face of libertarianism, that you have writers on the left saying, look, this shows just how harsh and cruel unregulated capitalism is and why we need to get away from capitalism and move toward a system that values people and not profits. And people on the right saying, the fire department did the right thing, we've got to get people to take personal responsibility for what they are doing. And what I want to argue is that libertarianism has shifted over time in its original form, it did not do remarkable things like have the fire department stand by and watch somebody's house burn down. Can I ask to complicate though that metaphor, the fire department that they contracted with in Albion County was a municipal fire department, so it was not a private fire department. Does that complicate anything or is this from my perspective, I remember that story when it came out was, you know, there are other private fire companies like Rural Metro in Arizona and in these instances, what they do is they come and they put the fire out and then they charge the homeowner a multiple of the annual fee. And that seems to me that's a great, you know, kind of solution, which is basically what happened in Albion County, right? Well, Albion did change its rules. Yeah, right. You can do that. And after the fact, yeah, because I think we certainly agree that there's something just totally fucked up, like, you know, when you have a fire department sitting there watching a house burn in order, you know, because of 75 bucks or something like that. But it seems to me that that I love that it's a great controlling metaphor. But I think the story might be a little bit more complicated given that with respect to the residents of the county, the municipal fire department for the city might as well be a private company. This was a municipal fire department supported by tax dollars, but with respect to people outside of the county, it just acted as a private contractor. They could have contracted with somebody else if they wanted to. So the fact that it was a municipal fire department really doesn't seem to have any bearing on this story. We won't we won't spend too long in this. But the fact that it was a municipal fire department rather than a private one, I think changes the way that they act towards people who didn't follow the rules exactly. Most most private businesses, I know, would be like, you know, OK, let's figure something out, especially when you're talking about a house burning down in the middle. You know, this is one of the reasons why, generally speaking, not always, but, you know, you go with UPS or FedEx rather than the post office because there's a mentality in a private business that is more amenable to human failure than I think that you often see in a kind of state sponsored bureaucracy. It varies, depending on the state sponsored. For sure. But OK, let's talk, though, about Hayek, your your read of Hayek. Tell, you know, explain what was the core of Hayek's classical liberalism or libertarian philosophy? So Hayek intervened at a time when there was a broad consensus on the part of an awful lot of folks that central economic planning was the only way to go in the future. That you would if I mean, there was a depression going on and the United States was in this awful depression. Britain and France were not much better. The world's most admired economic managers were Joseph Stalin and Adolf Hitler, because they were the ones who turned their economy around. And so there were lots of intellectuals who thought, you know, we don't like Stalin and we don't like Hitler, but central economic planning is the way to go. And that was the position of the British Labour Party. And so Hayek understands that this has been debated in Austria. There had been a furious debate about the whether it's possible to do the right calculations under socialism. And Hayek said there's already a literature showing that Karl Marx's vision of central economic planning isn't going to work, but it's all in German. And so the English speakers don't know about it. So I'm going to write a book trying to bring you folks up to speed about this. But Hayek adds something new that is not there in his mentors, which is the reason why he ultimately want to know about price, the capacity of markets to manage information, that there is so much information in a market, it's not just that you can't calculate all supply and all of the demand, it's not possible for any central planner to know it. You can only rely on the revealed preferences of consumers. You can't rely on surveys because the consumers themselves don't know what they're going to want. And so he argued in his book, The Road to Serfdom in 1944 that any centralized economic planning is going to be both inefficient and tyrannical. And so you've got to have markets if you are going to have a free society and a prosperous society. And do you go ahead. Do you generally agree with that? I mean, you define yourself as a pro capitalism leftist. So it's the idea that markets do a pretty good job of coordinating people's activities through price and other kinds of information that gets shared. And, you know, that's, you know, being whether you're a left. I mean, this is where that the kind of dedication or devotion to liberalism is not necessarily whether you can be left wing liberal or a right wing liberal. But it doesn't mean you're anti-capitalist necessarily. The argument of The Road to Serfdom, I think, has carried the day in the American political mainstream socialism as state control of the means of production. I mean, you will see that still being argued a lot in Jacobin magazine. But yeah, it is not the position of Bernie Sanders or Alexandria Ocasio-Cortez. Their views are you've got to have a free market economy with a much bigger welfare state than you have now, which is consistent with Hayek. Hayek understands that and tries to show that markets are not going to give everybody what they deserve. They're just going to maximize production and be efficient. And so there's no objection in principle to taxation and redistribution of wealth to compensate for losers. But I said the basics of the economy have to be a free market. Right. And if I may, he also argues, as you point out in the book, that he believed and I think he's also accurate in this, that free market economies tend to be more productive and that overall they raise the general level of wealth. And even the lowest among people tend to do better. You know, it's better to be poor in a market economy than to be average in a command economy, right? Yeah. And I say this is the argument of the road to serfdom. I mean, one of the things that I hadn't read it since I was in college. A few years ago, I wrote a book about the health care litigation where my argument was that there were libertarians like Randy Barnett, who, uh, Professor at Georgetown, who were trying to import their conception of liberty into the Constitution where it actually isn't. And that was what initially got me interested in libertarianism. So I reread the road to serfdom for the first time since college. And I was surprised to find that there really wasn't anything that I disagreed with that and I didn't think there really is anything in there that Bernie Sanders or Elizabeth Warren are going. Well, you would disagree or they would disagree that Hayek's idea of like what a good the size of social welfare spending would be lower than theirs, probably. Well, although, but he doesn't make such commitments in the road to serfdom. It's kind of there in the road to serfdom. Later on, he worries that anything above bare social minimum that is applied to everybody is going to put us on the slippery slope to socialism. What's really doing the work there is a prediction about political psychology. If the state has allowed any discretion at all to set different levels of income, that is going to slide us into socialist. So if you adopt social security in the ninth, that social security is going to take us to central economic plan. Right. It hasn't happened. One of, well, you know, the size, scope and spending of government continues to increase, so it may not take us to a full blown socialist dictatorship or anything, but it does, you know, more government spending, more government planning seems to lead to more of those. One of the things that I thought was really important that you stressed in Hayek is that, you know, partly at the root of Hayek is an understanding that capitalism while capitalism produces a lot of wealth and generally is better, you know, is a is a better economic system than others. It doesn't actually reward the best people or the smart people or anything. And that, you know, ultimately at the core of Hayek and his commitment to transfer payments, you know, of some sort is the idea that there is a hell of a lot of chance in the system and any system that is filled with chance, you need to be willing to help people who through no fault of their own or maybe even some fault of their own just end up on the losing end of things. That's the fundamental division between him and, for example, the Ayn Rand of Atlas shrugged or predecessors like William Graham Sumner who thought that markets give people what they deserve. Hayek's argument was that when you think about what people deserve, it is backward looking. Look at what they've done in the past and think that good things done in the past should be rewarded, whereas markets are forward looking. So, you know, I work for years to develop some fabulous product that's going to make everybody better off. Let's say, you know, some drug for some bad disease. And, you know, I finally do it. And then two weeks later, some lazy loud happens, luckily to stubble across something that's just as good as my drug with worse side effects. And I'm out of business and I should be out of business because no one wants my product and it's a waste of resources to produce it. So it's efficient to be forward looking and ask what people are going to want in the future, but it doesn't reward virtue. And I think pertinently for the contemporary American economy, there are an awful lot of blue collar workers who, you know, they faithfully worked in the auto factories. And then globalization happened and the information revolution happened. And now auto factories don't need a lot of manual laborers anymore. All the work is done by robots. And this is not the fault of the workers. The workers did not suddenly become lazier. The economy changed. Would you, before we go on to what has replaced Hayek, talk a little bit about, you know, let's what the Reds of Serfdom came out in 44, Hayek, you know, the Constitution of Liberty comes out in 1962. Oh, yeah. OK. So at that point, Hayek is kind of considered, you know, a strange person. He's kind of an outlier of, you know, what is considered like tasteful or contemporary political thought. Who would be who would be the leftmost contemporary of him that is still a classical or is a liberal devoted to, you know, the idea of limited government and individual rights, private property. Who is the most respectable person on the left and on the right who who haven't gone full blown, you know, John Birch Society, you know, autocrat on one side or a kind of communist on the left. Well, so the idea that there needs to be public power to countervail private power, John Kenneth Galbraith is running a line much like that. Galbraith is not proposing socialism, but he thinks that there are going to be these large private economic entities. You need big governments to counter that. Or and also at the same time that they are and I'm thinking of books like the New Industrial State where it's that large corporations that are effectively beyond what he thought were effectively beyond market forces will supply many of the welfare contingencies that the state might have in the past. But he's fundamentally is a capitalist. He is not a socialist. Yeah. And, you know, there are certainly people on the right who are well or don't necessarily embrace every detail of Hayek, but who are broadly libertarian, you know, Barry Goldwater wants a much smaller welfare state. Right. But I think some of Goldwater's rhetoric goes back to earlier people like Sumner. Yeah, explain Sumner. Who is Sumner? Sumner was a sociologist in the late 19th century who argued that essentially free markets are maximally efficient and give people what they deserve. You know, people on the market, they offer what they've got to offer. People trade with one another and we reward people according to their productivity. And that's fair. And for Sumner, is there any role for publicly funded welfare? Not clear that there is. When did that become in your reading? When did that become when did that shift happen? Because there had always obviously been, you know, certain forms of publicly funded charity in the United States just to keep it there. And, you know, and then publicly funded systems start cropping up in the late 19th, early 20th century. But when when did when did a shift happen or did one that was definitive? Is it the New Deal? Is it the Progressive Era? It happens in bits. You have the idea of some provision. You know, Otto von Bismarck comes up with a way to steal the thunder of the Marxists in Germany and Israeli and Britain goes a little bit down that road. But the idea of large scale public provision starts being developed by some Catholic and liberal Protestant leaders in the Progressive Period. And then their people take power in 1932. Roosevelt has these big majorities in Congress to basically let him do what he wants. He starts by experimenting with a sort of syndicalism that is very hard to defend. But the Supreme Court shuts it down pretty quickly. By 1935, he has moved away from that to free markets plus a welfare state of formulation, which remains the way that we do things in the United States. And 35 is when the Social Security Act was passed, right? And then I think it started paying checks in 1940. There's yeah, yeah. And I guess there had been state for I'm thinking back to my parents who were born in the 1920s in New York and Connecticut. They were receiving some state level benefits, if I'm not mistaken. During the during the depression at the state level, not at the federal level. But OK, so Hayek, you you find a lot of value in Hayek and his libertarianism before we move on from him. What's the role of individualism in Hayek and what do you like about that? And what do you think is the limit of that? Well, the idea that Hayek emphasizes and this is, I think, remains an element of the thought of even the progressive political left today is that everybody's different. Everybody's weird if we are opaque to one another. I don't really know you well enough to know what's good for you and vice versa. And so people should be allowed to decide for themselves how to live. And I'd say one of the points that I want to make about libertarianism more generally is that it is a species of liberalism. The idea that what we are aiming at in politics is to empower people to decide for themselves how to live, which is a new development in human history. There's that idea that people want to decide for themselves how to live. The state should try to promote that, not the greater glory of King Sargon or the greater glory of the nation or promoting the true religion or the master race, but focusing on the freedom of individuals. That's something new. And the fight between Rawlsian liberals like me and the libertarians is really a family quarrel within liberalism, where we are arguing about how to achieve what we all want, which is individual freedom. Right. And one of the things that you stress in your definition of freedom, a contemporary libertarian definition of freedom is always freedom from something, freedom from the government forcing you to do this or taking your money or making you sign up, whether it's for health care or whatever. And in fact, there is a liberal tradition and you put Hayek in this that freedom also consists of having the resources and the ability to do certain things, to actualize your life. And that includes oftentimes things like public goods or things like education and what not. Yeah, there's a there's a technical debate that Hayek participates in about how to define freedom, but ultimately that's right. What he wants is people to have the resources to decide for themselves how to live. And so I mean, what you what you're arguing is that Hayek effectively is doing this as well and that this is in a libertarian debate or a libertarian tradition that Hayek represents that that actually is a call for the state to provide certain basic necessities to people so that they can participate fully in life. Yeah, I think that that's right. So I mean, one example of a public good that is salient right now that I think has given mental status a problem is, you know, we just had this natural phenomenon, this event that we hope quite possibly, it's now controversial, wasn't anybody's fault, pandemics break out from time to time. That's something that happens in nature. And the state had this big pile of money that it collected through taxation. It confiscated it from individuals and with that money raised by taxation and embarked on this massive research program to come up with a vaccine for covid and it succeeded and I've been vaccinated by people who are listening to this, haven't gotten their bivalent booster. Go get it. But now you've just lost half the audience. But yeah, but Operation Warp Speed is something that you would argue is consistent with certainly with liberal political philosophy and a Hayekian libertarianism. I don't disagree with what I think it is consistent. It's not the obstacles to my freedom are not just other people violating the rights. Yeah, no. And, you know, but again, you know, this is also within a Hayekian conception of libertarianism, there is such a thing as public health that the government can act upon, you know, or act through in order to apply. Yeah. So but so that's kind of Hayek and that's the starting point of the book. But then, you know, your main argument is that, you know, that's that was that was libertarianism, libertarianism now. And I believe you use the term mutant or mutated into something else. And like most mutations in nature, the mutations are not good, you know, there's all the Marvel superheroes who are mutants and they get powers, most mutants in nature just die or have like three eyes and then give up the ghost. What has happened to libertarianism over the past 50 or so years? So it has become a kind of reflective anti-statism that opposes the provision of public goods that cripples the capacity of the state to deal with public bads, individual harms that can't be attributed to anybody who you can sue or penalize, such as, I think most saliently now, the emission of carbon dioxide into the atmosphere, pollution generally, each small bit of pollution doesn't violate anyone's rights and you can't point to anyone whose rights are violated. But if you can't do anything about it, it will render the planet uninhabitable. And so the only way to control it is by government either restricting the amount of pollution that is produced, or I think probably the most effective thing that you can do about climate change right now is what we did with the COVID vaccine, subsidizing research into cheap, clean energy. Because I mean, it's clear right now, the only thing that's going to prevent the burning of coal in third world countries is to come up with cheap, clean energy and hand it to the round of platter. You specifically, you talk about three figures who have replaced Hayek. And to a certain degree, Milton Friedman, who also was one of John Kenneth Galbraith's, you know, they were, you know, they were kind of like Laurel and Hardy right in mid-century America and the pages of Newsweek and elsewhere, you know, on an almost weekly basis, they duked it out. But it's Ayn Rand, Robert Nozick and Murray Rothbard, especially Murray Rothbard. Can you talk about the conceptions of Rand Nozick and Rothbard and how those have kind of taken over the libertarian movement? I mean, that as you say it. So Rothbard, who had been working in obscurity and libertarian think tanks for decades before libertarianism became big in the early 1970s, is basically an anarchist. He thinks that we should be able to have a capitalist system with no state at all. Because since there are games from trade, he agrees with Hayek about that. It's in everyone's interest to live together in peace and prosperity. And so we can, if there are just private police forces who contract with people, that private initiative will do everything much better and more efficiently than the state will because there's competition and competition produces higher quality products. And so that was his basic political vision. And so anything that moves us in that direction, this is going to sound familiar from the program of the contemporary Republican Party, anything that lowers taxes makes things better, anything that limits government regulation makes things better. Whatever shrinks government is going to be in advance for human freedom. Now, Rothbard seems to have been a very charismatic figure, had an enormous influence on a number of you. You never met him or I've seen videos, but I never met any of the people who I write about, the only one who I have personally met is Richard Epstein, who is a delightful person. I critique him in the book, but I like him a lot. The so one of the people who Rothbard influences is a graduate student at Princeton named Robert Nozick, who ends up being a professor of philosophy at Harvard. And Nozick starts from Rothbard's premises and tries to show how it is possible to start from a Rothbardian baseline where everyone's got a private protective association and have a state emerge through a series of legitimate transactions, but the state that legitimately emerges is a minimal state that protects people's persons and property and does nothing else. And that's called a Night Watchman state or Minerkey, right? Because it's a minimal the bare minimum state. So it's moving away from Rothbard to something where there is some public yeah, this that's going on, but it's a minimal state on Nozick and Rothbard debated about whether this is appropriate. Rothbard's I'm sorry, Nozick's book in the is also early 1970s. Anarchy, State and Utopia is published 1973. But, you know, again, this vision of an absolutely minimal state. And then the third person I talk about, probably the most widely read is Ayn Rand, who in her book Atlas Shrugged and also in her prose works that she wrote after Atlas Shrugged, makes her own case for an absolutely minimal state, really with driven primarily by a vision of the free, self-sufficient individual who doesn't depend on anybody. And that's what her literary heroes look like. And they don't need anyone. They don't depend on anyone. And that is a vision of the person that really drives her narrative. And it's kind of interesting when you talk about self-sufficiency, but you're a proponent of capitalism, because capitalism is so deeply embedded in relationships and communities and trading with people, right? Nobody, I mean, the whole one of the reasons why capitalism is free or induces freedom is because you don't have to do everything yourself. Oh, her vision of community, there is one of the things that I think that she has got in common with her enemy, John Rawls, is that both of them imagine a certain kind of respect among equals as the basis for the community. She thinks that in a world where people trade with each other, they are living together on relations of mutual respect. Nobody depends on anybody else in the sense of being able to make demands or having to answer the needs of anyone else. They are all self-sufficient. It's a world without any children in it. Yeah, they all take care of themselves. And you say Rawls, John Rawls, the another Harvard philosopher who wrote, who essentially Nozick is responding to. Yeah, right. Can you talk a little bit about John Rawls and why his work is important? Because he's a non-socialist liberal, but to the left, certainly, of Nozick Hayek Rand Roth. So the other source of Nozick is social contract theory. Trying to imagine a social contract. He is drawing on John Locke, who makes a social contract argument in the 1680s, had an enormous influence on the framers of the Constitution. The Declaration of Independence is essentially a summary of Locke when it says that the purpose of government is to protect our rights to life, liberty and pursuit of happiness. And so one of the points of argument between Nozick and Rawls is what a fair social contract would look like. And both of them really are disciples of Locke. So is Rothbard. And so really, we get into the weeds of philosophy. And yeah, let's do that for a little bit. Yeah. So, you know, because Locke is obviously one of the, you know, the wellsprings of liberal political theory. And talk a little bit about the role of property in a Lockean system. And then where do you think that goes wrong in either Rawls or Nozick? Or Rothbard. So Locke is trying to show that there can be some basis for rights other than as a gift of the king. He's writing in the 1680s to try to justify resistance to royal power. And he argues, you know, we didn't really need a king to have a just state. You could imagine us in a state of nature with no government at all. And there we can develop property rights because I can, you know, take a piece of land, farm the land. I've mixed my labor with the land nobody else has. If you try to collect from my land what I've grown, you are asking for the fruit of my labor, which you haven't got any right to. That's already wrong in the state of nature. We're wrong in the state of nature. But in order to secure people's rights with people come into dispute, we've got to have a state that can adjudicate the disputes that we are going to have about the rights that we already have. And so for Locke, the purpose of the state is to protect these rights, which include rights of property that we already have. And so then the Lockeans split Rothbard and Nozick each in a different way, say that's how we should think about the state now. The state exists in order to protect our property. That's what it's for. And it's violating our rights if it redistributes any of the property. That we have. Rawls is going to say this is not the world that we've actually lived in. The whatever wealth we've accumulated in this world is the product of a complex system of social cooperation. It's not you can't point to anyone who farmed their own land without any help from anybody else. It's a complex system of cooperation. It's very hard to figure out who deserves what we want to do is come up with rules of cooperation that are fair to everybody, that give everybody a stake in the system. And the problem with Locke's vision is that people can buy you take existing property rights as a baseline without asking for the justification of those property rights. People you can end up with rules that say only people who have a certain amount of property get to vote. And that's not a relationship among equals. If people are going to be equal, then they all have to have a stake in the system. And that means that the distribution of property has to be something that you can justify to everybody, the property and that you can you can ultimately tinker with. So, you know, would you explain the Rawlsian veil of ignorance because this is a way of talking about, OK, how do you get people to buy into a system because why would somebody buy into a system where it's like, OK, well, everything is distributed a particular way. And, you know, Andrew, I'm sorry, but you have nothing, but I have everything. Like that obviously is not a system that can be enforced through anything other than kind of brute force or the worst sort of psychological indoctrination. Yeah, as I said, one of the things that Rawls has in common with Ayn Rand is the idea of society as a cooperation among equals. Rawls thinks that there's going to be inequality, but he wants inequality that can be justified to the worst off person. And the way you justify inequality to the worst off person is you say, suppose that we entered into a social contract where nobody knew where they were going to end up, whether they were going to be rich or whether they were going to be poor, what would you agree to if you knew that there was a possibility that you were going to end up at the bottom? And Rawls thought that the answer that you could give to the person at the bottom is you are better off than you would be under a more equal system. And so you've got a reason to agree to the inequalities because you yourself, even though you're at the bottom, you are better off than you would be under any other system. And so in that system, the richest person can look you in the eye and say, I am not rich because of my unjust power. This is the best possible system for us to live under. And so and in acknowledging, you know, that there's an element of luck to that, but also a safety net he calls to he calls to mind Hayek in your conception of Hayek. And there has been vigorous literature among the political philosophers trying to come up with a synthesis of Rawls and Hayek and there are some very smart people, specialists who've been trying to work that out. And part of what I'm hoping to do in that in this book is bring that news to a broader audience that it is possible to have a synthesis of Rawls and Hayek that keeps the strongest elements of each. How much is it also that liberalism, you know, properly understood is as opposed to something like Rothbardian anarcho capitalism is not a kind of like ideologically extreme system or a totalizing system. It seems to me that the way that you talk about things and certainly I think this is true in Hayek, that he is not trying to take everything to the logical extreme and then say this because it is the most extreme. It represents the summit and the endpoint, the terminus of all logic and argumentation. Liberals are kind of, you know, they're directional. They are, you know, they're moving in this direction or that direction, but they're not necessarily trying to go to the extreme either for good or bad. Well, I mean, it really depends on what the extreme is. If what you are trying to do is give people power over their lives and, you know, liberalism does try to do that and markets are pretty good at supplying that. Right. You know, we don't know what the limits of that are. You know, we now have a pretty substantial population of people who live past the age of 100 didn't used to have that. Right. So, you know, we don't know. What I'm saying in Hayek, you know, for instance, the idea of regulation, you know, it needs to be defended, etc. But the idea that, you know, there will be some form of regulation, like you might be able to show that you don't need it in this particular instance, but he's not in a way that in a Rothbardian system in particular, that's gone. You know, we are at taking something to a logical extreme and then pronouncing that is where we need to live. Well, Hayek's logic is not of the best. He's not a great magician. I'm sorry, Rothbard's logic is not of the best, I meant to say. But Hayek lays down conditions for regulation. In order for there to be regulation, there has to be some market failure, some externality positive or negative, or there's got to be some public good. That isn't being supplied or some systemic problem. Some problem that the market can't solve. And if the market can solve it, then you let the market solve it. And modern heirs of Hayek, like Milton Friedman or Friedrich Hayek, or for that matter, many of the writers for Reason Magazine, I think perform a valuable service by pointing out ways in which the particular places where the state has stuck its nose into something that private arrangements can do better and the hypothesis that we can do better than have the state do this or that thing is a hypothesis always worth testing. Right. So what explains you? You mentioned, you know, Nozick and Rothbard and I assume you're talking about for a new Liberty Rothbard, which I think 1973 as well as Anarchy State Utopia, Reason Magazine, which is called Reason because the founder of it was a kind of apostate objectivist, but he like he followed on random believing that reason, the capacity for reason is what makes humans distinct and unique. So that's why it's called Reason wasn't a hardliner. But, you know, that we started in the late sixties. There's this flourishing of a libertarian of a kind of modern libertarian, a Rothbardian, a libertarianism that is straining towards Anarchy. What do you think explains its emergence at that point in time? I think the people didn't trust the state as much as they had in the past. I think they're too big to put it that way. It's like for obviously good reasons, right? Yeah, for legitimate reasons. Right. Particularly younger men are faced with a world in which the American government, which your father had so much trust in, is going to send you to die in Vietnam for no good reason, will diminish faith in the state. Right. And then received authority and received ways of doing things were called to question by the civil rights movement. And then there were various ways in which the American economy just wasn't functioning as well as it had the oil shock of 1973. You know, it diminishes people's faith in so does Watergate. So all of this diminishes people's faith and trust in the state. Yeah. Where where does Rothbard go wrong? And Rothbard is really and you know, pushback if you don't want it to be character as if Hayek is the hero, Rothbard is the villain of this book. Where does where does Rothbard go wrong? I think that Rothbard is way too optimistic about what a world will be like without state power and you're really starting with the police. You know, the idea that there are gains from trade if various armed groups in the same geographical area don't fight with each other. It's been tested over and over again. He calls them private police forces, but without any overarching government. The more appropriate term is warlords and warlords tend to fight with one another. And even I mean, the closest thing that you get to a system of cooperation among such warlords in modern civilized circumstances is the Mafia Commission of the mid 20th century. There's just enormous gains. Another everybody wanted to have like larger, you know, organizations, right? Like corporations got bigger, the mafia got bigger and everything. It's these interlocking directorates, right? Clearly, there are big gains if they can maintain peace. That's why the Mafia Commission got put together in order to maintain peace. But it is punctuated by frequent wars and assassinations. It is an unstable equilibrium. As power shifts, then wars are the way in which new equilibria settle themselves. If you want to maintain peace over a long period, there has to be some central source of armed force, some single central source of armed force that is able to maintain that peace. And Rothbard did not see that. And more generally, the other roles of the state that he couldn't get his mind round, he had a lot of trouble with the phenomenon of pollution. He opposed all of the anti-pollution legislation of the early 1970s. But what he offered in his place was either private tort suits or private ownership. He was certainly right. If I'm sitting in my office here in Chicago, I'm looking out my window at Lake Michigan. If one person owned Lake Michigan, he could keep anyone from polluting Lake Michigan because he could see anyone who owned Lake Michigan. If someone owned the atmosphere of the earth and they could get an injunction about any against anyone who could emit carbon dioxide into the atmosphere. But come on, no one can own this. If you leave it to private tort suits, the amount of the suits is too small to be worth bringing the suit. That's why someone who's generally pessimistic about state power like Richard Epstein eventually became persuaded the only solution for problems like that is regulation. And I think that Rothbard resisted that. So do the modern libertarian opponents of any measure to deal with climate change. If climate change is real, that calls into question their philosophy and choosing between their philosophy and reality. They reject reality. Where does let's talk a little bit about state capacity because one of, you know, part of the arc of the book, which again, I want to recommend to every person who calls themselves a libertarian, I think they should read your book because it's both interesting and informative and challenging, you know, and I say that as more of a Hayekian than a Rothbardian to be sure, so it's kind of like, oh, well, this is kind of on my guy's side. But I absolutely mean that. You talk about how libertarian thinking has won many significant battles. And, you know, from within the libertarian movement, I mean, I can tally up all the things like ending the draft, you know, which Bo Freedman is tightly identified with changing the understanding of taxes, understanding the role of, you know, government spending and inflation, all many, many things. The rise of equality for sexual minorities, you know, huge libertarian when drug drug law liberal the end of drug war and liberalization of drug laws, many, many things free trade will get to some of this, you know, the argument for immigration as a as a human right, but also as an economic boost, etc. But there's a widespread sense among libertarians that we've been, you know, whatever wins we've had have been dwarfed by the fact that by any measure, the federal government and the state and local governments now are bigger than they were, say in 1950, they spend a larger share of the economy. There are more regulations just in general, but also what are called economically significant regulations, regulations that cost a hundred million dollars or more to implement, have that effect on the economy. How has state capacity in a world where we have just come through a number of years where the government spending as a percentage of GDP, where the rules and regulations of what businesses can and cannot do has expanded massively, how has state capacity been eroded? You know, just that all much less through libertarian thinking. Well, there are several issues in what you said. Government spending, for the most part, is transfer payments, is social security and Medicare and the military. Those are government spending. The social security and Medicare, I think from a liberal standpoint, the fact that old people are able to live are reasonably secure lives is a gain for liberty. And so the fact that independent of independent of need, because that money does come from somewhere, I mean, it's coming from younger and poorer people who may or may not participate in it. But I mean, to you or I, I don't you are. I think I've read your 65. Is that right? Yep. Congratulations. You look, you know, younger than that. But like I'm a few years younger than you. But, you know, I don't need social security. Do you turns out that is that a gain for freedom that you get an extra, you know, twenty five hundred dollars a month that more than three quarters of the people who get social security, it's their main source of income. And now there was a political calculation that Franklin Roosevelt made that if you wanted this thing to be politically stable, everyone had to feel an entitlement to it. It couldn't be me. Right. It had to be something that everybody got. And that political calculation turned out to be a pretty robust political calculation. You know, so I don't need social security. I'm actually not collecting it yet. I can live on one question with me. But so I think the aggregate overall effect is that poverty among the old is a tiny fraction of what it was before social security. And the other thing that's happened is that the cost of medical care has gone up dramatically. Also, the quality of medical care has gone up dramatically. But the cost of it has gone up dramatically. And one tends to need more of it as one gets older. And the fact that basic medical care is available to these people who would otherwise be impoverished, lengthening their lives and improving their health again seems to me to be a gain for liberty. And this is not how though. But then how has state capacity been eroded? Because you've you've said you argue in the book. So so that goes to if we're spending more and we're giving more money to more people, that's what transfer payments are. And we assume you and I would disagree. I'm sure over, you know, I'm happy to see lower income people have transfer pains made to them. You and me, not so much. Yeah. So when you talk about state capacity, I mean, we can put what government does into three tranches. There's the military, which is its own thing. They're transfer payments. And then when we talk about state capacity, we're really talking about regulation and there is, you're right, quite a lot of economically significant regulation since the Reagan administration. The rule for at least federal regulation is that it has to withstand cost benefit analysis that you've got to show that the benefits of regulation exceed the costs. Sometimes the costs can be really hot. Sometimes this is a serious burden on business. But if you impose a regulation on business that costs business a hundred million dollars, but if the business was not thus regulated, it would impose harms amounting to two billion dollars. Then that hundred million dollars is a hundred million dollars well spent. My objection to the general opposition to government regulation, which I guess the the strictest resistance to government regulation that we saw was under the Trump administration, Trump's general analysis of regulation was to just look at the cost of business, not its benefits. So if a regulation was going to cost a hundred million dollars, even if it was going to prevent two billion dollars of harm to ordinary civilians, a hundred million dollars is too heavy a burden to put on business. And that's an impairment of government capacity. So is getting rid of mid level government bureaucrats, which is something that Trump did to some extent in his first term, certainly means to do much more of it. Certainly compared to, say, 1960, the percentage or the number of federal workers per hundred thousand, whatever, per capita is significantly lower. And that's been declining under both liberal or Democratic and Republican regimes. So there's that. Can I ask? Yeah, I mean, I guess I have a question about I, you know, I don't doubt that the, you know, in many significant ways, the libertarian message of the idea or, you know, one shorthand is that the government is at best incompetent and at worst is malevolent. That has kind of carried the day. And, you know, you heard the version of that when Ronald Reagan said, you know, the worst thing you can hear is, you know, I'm here from the government and I'm here to help you or government is not just the solution to our problems. It is the problem. That that rhetoric has carried the day. I mean, most people have a negative view of government. If only we didn't have this awful covid vaccine, we'd be so much freer. You know, you really should have left that money in the hands of the taxpayers. And we just will be so much better off. It's just are you. It's a hypothesis, but it's a wild overgeneralization. Here's a question for you to test your pro-capitalism leftism with something like bailouts, which and, you know, it is hard, it is much harder than I think any of us, you know, will admit too often to calculate, you know, did the Obama era stimulus work? Did certain did certain stimulus spending by George Bush in 2008 or by Donald Trump at various points, did these, you know, have benefits that were bigger than their, you know, than what they cost? But that when you deliver more of whatever transfer payment is being made to the individual, that that is generally better than giving it to large existing interests that are either political or corporate in nature. Well, I think that again, I think that you have to get into the weeds. Probably the biggest intervention of the biggest bailout to the biggest entities in the Obama administration was saving the auto companies in a free market. They would have gone belly up and about a million jobs would have disappeared. In the long run, I suppose that those workers, grandchildren would have found employment, but you would have had pretty severe economic devastation in the meantime. And so given that degree of dependence on the status quo and the fact that these were perfectly well functioning companies that that there was something wrong with the company, so that was that they were dealing with this massive economic shock that did not originate in the auto industry. It originated in the banking industry. If you heard the housing industry, we will argue, we'll disagree about this. You know, but that I mean, because there is a I think a strong economic argument to have allowed companies to go bankrupt because their assets would not disappear. They would not be buried in the ground insulted. But I guess to to what I would like to do in a in a few minutes is talk more concretely about some of the limits of, you know, because again, I think that your kind of analysis of what libertarianism was and what it has become is absolutely accurate. You know, we have gone from a movement that was, if not primarily was largely Hayek. At one point, you said he was the most important libertarian, but has left and left behind by the movement in favor of a broad Rothbardian animus. And I think you make a pretty convincing argument as well. I'm sure people who are Nozick fans and Rand fans will be upset by the fact that you say, you know, that they're really channeling different aspects of Rothbard, who is the complete full vision of of what they're getting at. So I want to talk, though, about the limits of kind of your vision of what even Hayekian liberalism can allow. And can we talk about your your discussion of drug use and about why certain laws against drug use should be, you know, you know, that that a certain amount of drug war is good. Can you explain that? Well, certainly, I can start by saying that I don't embrace the brutal counter productive policies in the United States. But there is a lot of room between what the United States does now and having a defense and they'll be available at every 7-Eleven. You can make. There are things that you can do to make it more difficult to obtain these things on impulse. And there are things that you can do to. We're going to come from the government. They come from any place to help people who do get addicted to get off of them. There are things that you can do to reduce harms that are only going to come from government. And what what are those? Well, you know, the. So, I mean, it is extremely difficult today to get drug treatment. Just, you know, far less available than it ought to be because the people who need it generally don't have a lot of funds. People need better information about the dangers than they have now. And, you know, going beyond drugs, there are other areas where people don't want to have to calculate everything that they decide to do in life. I'm going to decide how safe a place to work or whether to have airbags in my cars. I can't calculate the dangers of cars and whether airbags are, of course, justified. That's a kind of paternalism as well. There's all kinds of decisions that people with bounded rationality would like to not have to make for themselves. And so government paternalism in those areas makes us better off. I think that I am freer because I don't have to decide every time that I walk into a convenience store, am I in the mood for some fentanyl or cocaine right now? Can I just to push on this because it's I mean, it's an interesting concern and I think it illuminates. I think we're we're in the same family, right? But we're at maybe different ends of the table. You know, let's assume cocaine is legal again in the United States. And it's sold, you know, perhaps subject to the same regulations that beer, beer, wine and alcohol are. Would you do you think the benefits of that kind of system where you would have first of you would have producers who are liable for putting out a product that is adulterated, where they would also have to, you know, they would be legally bound to provide certain kinds of information about the dose, you know, et cetera and things like that. Would that actually cause more harm than what we see now? Are you more likely to use cocaine and to abuse it? Are you more likely to die? I mean, the people who die from fentanyl overdoses are not meaning to. Legality, people are mistaking about the doses. They don't know what's in it. You know, a lot of harms. And I'm not I'm not trying to be pedantic here. I'm just saying like this seems to illuminate a lot of. You know, we did, you know, we saw some experimentation with this. We know a bit about opium in China in the 19th century is completely illegal, available to anybody. And it's estimated that something like one to two percent of the population were what can roughly be translated as opium socks. People who I discovered opium and that was pretty much the end of them. All that they lived for was consuming opium. Those people would have lived better lives. Have they not discovered opium or opium had not been so easy to get? So that's why I think with respect to a very. Do you think that applies to contemporary American? It's not like we have transcended history or basic human desires and failure and psychology, but if we look at it now, would you know, are you worried about the shift to, you know, and just yesterday in the midterms, you know, a bunch of states legalized marijuana, some decriminalized psychedelics, not states, but cities and jurisdictions and whatnot. Is that does that worry you or is that also in advance for human freedom, both in terms of people getting to choose to legally use substances that make them feel the way they want to feel, but also in kind of minimizing that all of the, you know, criminal justice superstructure of the drug war. The criminal justice superstructure is absolutely destructive. I mean, the problem for policy is on the one hand, making these substances available to people who use them responsibly and whose lives are made better because they have this option and protecting the people who would hurt themselves. And so the aim of policy, there are various ways of implementing it. But, you know, I'm just thinking at the level of philosophy, you would like to be able to make it less likely that the people who are going to hurt themselves are going to hurt themselves while at the same time making it available to the people who know what they're doing. Yeah. Andrew, can I ask just very quickly, let's do a little bit of biography. You're 65, you look younger. Where did you grow up? I know you went to Chicago at University of Chicago at some point. But what's your background? Yeah, I grew up in the suburbs of New York City and Rockland County. And I went to high school there, went to the University of Chicago, because that was the best school I got into. Came back East, went to I worked as a newspaper reporter for a while. And where did you where did you work and what kinds of stuff did you cover? Yeah, just what you cover news, which turned out to be great preparation for graduate school, because you had to write things fast. Little week of paper with almost no staff. And I went to graduate school in political science at first at Georgetown and did well there and transferred to Yale Law School was a strategy for avoiding coming up with a dissertation topic. And which was great. They left me alone until I finished law school and then I ended up writing a dissertation about the philosophy of anti-discrimination law. And I taught political philosophy and public law at Princeton for five years and then came to Northwestern. And here I am. I got interested in libertarianism because the Obamacare case got me interested in the legal issues there. And you were particularly bothered. You go into this at some length in the book by Randy Barnett's insistence or rather the argument that part of the problem with Obamacare was the mandate that, you know, the libertarian argument, which to a certain degree ended up carrying the day not because the Supreme Court agreed fully with Randy Barnett, but ultimately the Trump administration did stop enforcing the tax law, the tax provision. But reduce the tax to zero. So and with different results that anyone anticipated, you know, all of the models said that if you didn't have this penalty, that the whole system would collapse and not happen. But are you happy with Obamacare at this point or, you know, the way that it's played out? Well, it is like many political deals. It is an unhappy compromise. At time one, we have the horse and buggy. Someone develops the internal combustion engine, but the wheel rights and the horse farms are sitting at the table when you negotiate. And so we get this new means of transportation, which is a horse and buggy on the back of a flatback truck. Right. And that's basically Obamacare. I mean, it's it's frustrating. It's frustrating, though, would you agree not, you know, without getting into a philosophical or political argument that, you know, it's if that was the one time in our lifetime when health care health policy is going to be done, it doesn't seem like it got us to where we should be. Obama made the political calculation that given that the Republicans were not going to cooperate at all and he was going to need every vote he could get, that he was just going to think about coverage and he was going to make any compromises he had to in order to coverage to cover the millions of people who were losing coverage and he did. He accomplished what he wanted to winning in a squeaker in both houses of Congress. So his political cap clearly were right. What you really would need in order to do things to control cost is a bipartisan compromise, which is, you know, the parties have to care more about the country than they have to about scoring points off the other party. Can I ask in general, are you, you know, are you in fact one of the things that I've come to understand? And I think this is kind of from a Hayekian perspective, and it's fun talking to a pro-capitalist leftist, you know, that we assume markets work pretty well. You know, you and I will agree. Many of my libertarian colleagues might not, you know, that we want to bound the markets, you know, both, you know, especially in the bottom, we want to help people where markets, you know, they're either not working well with markets or the markets leave them behind, but giving people more, you know, more access and more decision rights and more money to figure out how to do things. So instead of food stamps, which say, OK, well, you can buy skim milk, but not whole milk or whatever, you give people an unrestricted cash transfer and say, you know what, buy what you need, you know, health care, here's money, get insurance and a more in a looser market, there would be more options, more price points and things like that, housing, etc. Does that appeal to you as a pro-capitalist leftist or is that too laissez-faire? With all of these, I want to get into the weeds of policy. I mean, the health insurance market is an odd market because there is such enormous pressure to experience rate individual people. So, you know, on a completely unregulated market, if you had cancer when you were in your 20s, you are in trouble for the rest of your life. And all of the market, I mean, the fact that we don't have, you know, we have markets that are, and I think that's part of your point about capitalism is that capitalism markets are always embedded in a particular time and place. So trying to get to a pure market is not really going to happen. But insurance markets are such Frankenstein monsters, right? Like where they don't cross state lines, they don't do this, they don't do that. I mean, it's very constrained. But there's also things that we want that the markets won't supply. We don't want somebody to be economically crippled for the rest of their life because they once had cancer. We don't want somebody who otherwise would start a small business to always have to work for a big employer because they once had cancer. Right, right. So you, I guess, as a final, you know, question for you, what is the what do you think is the way forward? You know, I made it sound like I knew exactly what I was going to ask. You know, where do you see libertarianism going? And where do you see, you know, you alone are not alone, but you're in a kind of lonely crowd to be talking about libertarianism as a major source of political kind of activity. You know, we're living in a world of Trumpism on the one hand or national conservatism, and it seems like a resurgent left wing, progressive left wing, whether it's Bernie Sanders or AOC. And there are meaningful differences between the two of them. Where do you see libertarianism going as a social or political or cultural force over the next decade? Well, you know, I can't make predictions. What I am trying to do in the book is explain what's valuable about libertarianism. I mean, I'm a political philosopher. I'm just trying to refine our conception of what kind of society we want and offer reasoned arguments for a particular vision of society. The valuable thing about libertarianism, which follows the line of Hayek, I think, is looking at what government now does and asking ourselves whether there are aspects of the government that are incompetent or inefficient or could be better done by private initiative. And so libertarianism is really valuable for generating hypotheses like what you suggested before, let's get rid of food stamps and just give people money. Well, let's try that someplace and see what happens. It is in the nature of policy that we can sitting here, we can hypothesize a policy, but unless we try it, we don't know what's going to happen. And I've got to say Friedman in the 60s was extremely valuable. There were a lot more of these inefficient policies. Then Hayek has become more and Hayek, libertarianism has become more influential now than it was then. But you go back then and you look at what the Civil Aeronautics Board did. It's a scandal and Friedman was absolutely right. And so testing hypotheses like that, you can see Richard Epstein pushing similar hypotheses now, sometimes right, but you've got to get into the weeds of particular policies in order to find out. Do you think, you know, we're at a time where we talk about political polarization and ideology Trump or party affiliation, Trump and everything? Is there a way to get to that point? You know, some of some of the people who did the most kind of, I guess, maybe Chicago School or Hayek in and I realize these are two distinct movements. But, you know, people like Alfred Kahn, who helped kind of first in New York state and then nationally to deregulate the airline ticket pricing systems. Some of the people who worked to deregulate interstate trucking, which at the time was seen as like you couldn't do that. You know, and that is one of the biggest gains that really never gets talked about how much cheaper goods became when the trucking market came free. But there were Democrats. I mean, a lot of this, a lot of the key deregulation happened under Jimmy Carter and people like, you know, Alfred Kahn was a lifelong Democrat. Is there is there a way to get to where we're talking about policy and the effectiveness of policy rather than, you know, kind of political or tribal affiliations that seem to stymie any kind of good faith, you know, arguments, conversation, discussion of ideas? Well, what the argument that I'm trying to present in the book that I think is a contribution to ameliorating that polarization is to point out that we are all concerned about human freedom. We want people to be free to live their own lives. We are arguing about how to deliver that. And so we are arguing about means and not ends. And because we're arguing about means, this ought to be susceptible to investigation of the world to find out who's right. We are not in bitter disagreement about what we should want in a way that I think that I am in absolutely bitter, irreconcilable disagreement with Vladimir Putin. All right, there's just we can't be friends or the ruler of Iran. It's not we have any ideals in common. And the debate over libertarianism isn't like that. I disagree with the Rothbardians, but we all believe in human freedom. So we can talk to each other. Yeah, that's a great that's a great note to end on. I want to thank you, Andrew Koppelman, for talking to me, but more importantly for writing, burning down the house, how libertarian philosophy was corrupted by delusion and greed. Thanks so much. Thank you for having me. This has been fun.